SAUDI ARABIA. The Public Investment Fund (PIF), the country’s hugely powerful sovereign wealth fund, plans to create a world-class travel retail company to reflect and help drive the Kingdom’s burgeoning tourism and aviation sectors, The Moodie Davitt Report can reveal.
The plan – understood to be called Project Travel – is designed to develop a powerful new player expected to launch in January 2025.
Project Travel envisages a multiple billion-dollar company being created over the next decade, in the process becoming one of travel retail’s top ten operators {industry rankings are dictated by The Moodie Davitt Report’s annual Top Travel Retailers league}.
Recruitment across key leadership positions is understood to be already underway.
The new entity will operate select airport, downtown, border, cruise and inflight retail stores, serving the projected exponential growth of the country’s travel & tourism sector. It will also seek to expand abroad in due course.
Future positive
The new entity’s creation is in line with Vision 2030, the nation’s highly ambitious and transformative economic and social reform plan.
As reported, Vision 2030 is designed to reduce the Kingdom’s traditional dependence on oil by diversifying the economy into other sectors, tourism primary among them.
The PIF, considered the engine powering the transformation of Saudi Arabia’s economy, plays a crucial role. Its strategy is to propel the national economy with an impact felt well beyond the country’s borders.
The fund is expanding its portfolio of international assets, investing in global sectors and markets by building strategic partnerships, and launching initiatives to contribute to the Vision 2030 goals.
The Moodie Davitt Report has reached out to the PIF. We will update you in due course regarding this seminal industry development. ✈
The Moodie View: It is difficult to overstate the significance of the Project Travel development, writes Martin Moodie. Travel retail is principally a sub-sector of two ‘parent’ industries – travel & tourism and aviation, both of which are undergoing profound change in the Kingdom. Now travel retail is set to join them centre stage.
As I noted in an extensive report on the Saudi travel ecosystem in late 2022, the pace of change and the ambition that underpins it are arguably unrivalled in the aviation and tourism world. All this is being driven by Vision 2030, a powerful and transformative economic and social reform blueprint that is opening Saudi Arabia to the world and within which tourism – sustainable and regenerative – plays a pivotal role.
Extraordinary giga-projects such as NEOM, Diriyah (which anchors a vision for the future on a jewel from the Saudi past), The Red Sea Development Company, AMAALA and others are capturing global attention and admiration. And not just for their astonishing scale but for their combination of natural wonders and sympathetic development that augur well for the new, more empathetic mode of tourism so integral to Vision 2030.
Before they discover such attractions, international visitors must, of course, first enter Saudi Arabia through the Kingdom’s airports. There is no doubting the PIF’s determination to ensure a world-class retail offer is there both to greet them (approval for duty free arrivals shops was granted on 6 September 2022) and farewell them.
Not just at airports either. Earlier this year Cruise Saudi announced an exclusive collaboration with Gebr. Heinemann to manage the shopping offer onboard its new premium cruise line, AROYA Cruises. The German travel retailer is also set to operate the new duty free contract at Jeddah King Abdulaziz International Airport alongside Jordanian Duty Free Shops and Astra, as first revealed by The Moodie Davitt Report.
Lagardère Travel Retail through Aelia Duty Free also enjoys a strong position in Saudi Arabia, having played a pioneering role in raising retail standards at Jeddah King Abdulaziz International, King Khalid International (Riyadh) and Dammam King Fahd International airports. Aer Rianta International has a thriving duty paid operation at King Khalid International.
What makes Project Travel even more interesting is the plan to break into the top echelon of travel retailers. For that to happen, any new entity will need to grow at home and abroad. But as anyone who has monitored LIV Golf or the fund’s acquisitional activity in football both at home and abroad knows, the PIF has neither an inability to enter the big league nor qualms about doing so.
Given that ambition, the challenges of securing offshore airport contracts, and the need to fast-track such an ambitious entity, M&A activity shapes as a very real prospect. Watch this space. ✈
Note: Martin Moodie will be speaking at the forthcoming ACI Asia-Pacific & Middle East/ACI World Annual General Assembly, Conference and Exhibition (WAGA 2024), which will take place in Riyadh, Saudi Arabia from 21-23 May. For details click here.
